The American Law Institute describes itself on its Web site as “the leading independent organization in the United States producing scholarly work to clarify, modernize, and otherwise improve the law” and touts its publications as “enormously influential in the courts and legislatures.” In the case of an upcoming ALI tract on the subject of software licenses, that’s precisely what has some people worried.

Sometime in early 2010, the group is due to publish its first-ever Principles of the Law of Software Contracts. What’s causing consternation in pockets of the software industry is a single 69-word paragraph buried within the 350-page tome. The paragraph in question says that it is a “best practice” to include warranties for no hidden material defects in software licenses. Going further, the paragraph in question suggests that the warranties should extend to “any party in the normal chain of distribution.” That would potentially obligate a vendor to make good on any faulty software, even if it was bought from a distributor, reseller, or consultant. The problem: virtually no software vendors currently offer such assurances. That has led critics to say ALI is creating a best practice out of whole cloth. And, these critics argue, if judges look to ALI for guidance when considering software license disputes—as ALI suggests they will—they will end up on not-very-solid ground.

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